Listen to him carefully about the 1st and 2nd Liens your loan may be involved in.

Via Josh Rosner-

Estimates suggest $13B of new RMBS next year but investors are no more safe than in 07. SEC’s Reg AB fix still nowhere!

by Josh Rosner

Graham Fisher & Co

The widespread view that the economic crisis is rooted in housing market problems is too simple. Between 1989 and today, securitization markets, and therefore the capital markets, replaced banks as the lead funding for home mortgages. It is true that excessive social engineering to over-stimulate housing purchase drove speculation. This was the result — not the root — of the excessive liquidity and irresponsible lending and borrowing that produced a withdrawal of liquidity to the mortgage finance market and an ongoing cycle of falling home prices. The actual root is a poorly developed securitization market that led to the ultimate breakdown of the private securitization market.

Ongoing problems in the mortgage market, from servicing conflicts between first and second lien-holders to missing documentation and poorly managed foreclosure processes, all are rooted in contractual failures of the securitization markets and relationships between parties to securitizations. Even today, the impacts of a broken securitization market have ensured that banks continue to hold bad assets, often at false marks on deteriorating collateral values, and many remain seriously under-reserved. The absence of this market, through which banks make loans and sell them, instead requires that banks hold nearly all of the loans they make. Given the liquidity risks and collateral value declines in major assets, many banks recognize the relatively higher risks of lending and have chosen to surf the Treasury curve as safer, more liquid and more profitable business. Unless private credit markets resume through securitization, private credit may continue to contract and we may have replaced global mortgage bubbles with fundamentally unsupportable sovereign debt bubbles.[…]

Posner can’t stop from blaming borrowers. This is a propaganda victory. When a consumer walked into a bank they generally had little to no idea, that the Bank was setting them up to fail. Nice attempt at re-writing history. I’m staying with Bill Black’s assessment.